Brussels announced today the lifting of European customs duties on imports of Chinese electric cars to about 38%, as it seeks to avoid a trade war with Beijing, which it accuses of illegally providing support to local car manufacturers.
Germany, whose cars are widely distributed in China, fought, along with Sweden and Hungary, to avoid imposing sanctions on Chinese manufacturers, for fear of retaliation. For their part, France and Spain pushed for targeted and proportionate measures.
For his part, Chinese Foreign Ministry spokesman Lin Jian expressed his regret during his regular press conference that “the European Union is using this matter as a pretext to impose customs duties on electric cars imported from China.”
“This contradicts the principles of the market economy and international trade rules, and undermines economic and trade cooperation between China and the European Union, as well as the stability of global automobile production and supply chains… Ultimately, this will harm the interests of the European Union itself,” he said.
China warned that it “will take all measures to vigorously defend its legitimate rights.”
Until now, vehicles manufactured in Chinese factories were subject to a 10% tax in the European Union.
Brussels plans to add compensatory duties of 17.4% to the Chinese company BYW, 20% to Geely, and 38.1% to SAIC Motor, after nearly 9 months of investigation.
For other manufacturers, an average fee of 21% will apply. Its amount will vary depending on the levels of public support received.
The European Commission explained in a statement that these initial tariffs had been communicated to the various companies concerned and the Chinese authorities “to study ways to solve the problems identified.”
She added, “If talks with the Chinese authorities do not result in an effective solution, these initial countervailing duties will begin to be implemented as of July 4,” but “will not be collected unless final duties are imposed.”
Brussels will have four months after imposing the initial tariffs to impose final tariffs, which opens a window for dialogue until November.
Europe, which is the cradle of luxury car brands, fears the closure of its factories if it fails to stop the announced increase in Chinese vehicles, which are pioneers in the field of manufacturing electric cars.
German fears
This dispute is part of a broader context of trade tensions between the West, led by Washington, and the Asian giant, which is also accused of distorting competition in other sectors such as wind turbines, solar panels, and even batteries.
In the United States, President Joe Biden announced last May 14 an increase in customs duties on Chinese electric cars to 100%, compared to 25% previously, which turned the American market into a fortress dominated by the national company Tesla.
The European Union hopes to protect the sector that employs 14.6 million people in the bloc, as well as avoid a large-scale conflict with its second economic partner after the United States.
Concern is also spreading among German automakers Audi, BMW, Mercedes, and Volkswagen, which generate up to 40% of their global sales in China.
Hildegard Mueller, head of the German Automobile Manufacturers Association (VDA), said, “The potential harm from the measures announced today may be greater than the potential benefits for the European and German automobile industry in particular,” while German Transport Minister Volker Vissing warned on Wednesday of a “trade war.” “With Beijing.
Moreover, China, which overtook Japan last year as the world’s largest car exporter, invested very early in battery technology, which is the most important component of the electric cars in which it specializes.
In Europe, Chinese brands are growing rapidly thanks to their competitive prices. Its share rose from less than 2% of the electric car market at the end of 2021 to nearly 8% at the end of 2023, according to the Gato Institute.
Chinese cars have benefited significantly from the ban imposed by the European Union on sales of gasoline and diesel engines by 2035 to combat climate warming.
